Net sales of the H&M company rose by 8 per cent to SEK 54,948 m (51,015) in the first quarter of 2020. Net revenues of the company rose by 5 per cent in local currencies. The development of its sales in the second half of the quarter was negatively impacted by the COVID-19 virus outbreak, particularly in China. Sales in China rose by 27 per cent in local currency from 1 December 2019 to 23 January 2020.
However, demand then decreased significantly as a result of the rapid development of the virus and therefore H&M group’s sales in China decreased by 24 percent in the quarter as a whole. At its peak, 334 of the group’s 518 stores in China were closed in February.
Excluding China, Hong Kong, Singapore, Macau, Japan and Taiwan the H&M group’s sales in the quarter increased by 7 percent in local currencies.
So far in March sales have been negatively affected mainly in Europe as a consequence of the continued spread of the virus. The situation in every country is changing rapidly. Following decisions by the authorities, all of the group’s stores are temporarily closed in Italy since the past few days and during the weekend all stores were also closed temporarily in Poland, Spain, the Czech Republic, Bulgaria, Belgium, France and partly in Greece. All of the group’s stores in Austria, Luxembourg, Bosnia-Herzegovina, Slovenia and Kazakhstan are closing from Monday. The online store remains open. In China sales have gradually started to recover as the situation in the country has improved.
The H&M group works tirelessly to address the COVID-19 situation, with the highest priority being employee and client health. As the turnaround work of the H&M organization continues at full pace, all operations within the business are now being carefully assessed–both from a cost and risk viewpoint–so that the adverse consequences associated with the virus can be mitigated as far as possible. Further details will be made available when the interim Q1 report is released on April 3.